Monday, April 11, 2011

"Super-Rich" Aren't the Same from Year to Year

For the 2011 season in Major League Baseball, the average salary for the top 25 highest-paid baseball players is $19,751,000, with Alex Rodriguez of the New York Yankees leading MLB at a salary of $32 million, according to the USA Today Salaries Database. In comparison, during the 1988 season the average salary for the top 25 highest-paid players was $1.955 million, or $3.657 million in today's dollars. The highest paid player that year was New York Mets catcher Gary Carter, who made $2.36 million that year, or $4.41 million in 2011 dollars.

"Are the rich really getting richer? That’s a pretty standard line from the Left, a lament usually cited in the course of calling for higher tax rates. Robert Reich is particularly fond of this mode of attack: A recent post of his was headlined, “For 70 years, the wealthy have grown wealthier.” Professor Reich probably doesn’t write his own headlines, but it’s a common enough sentiment for him, and his prose is rich with phrases such as “the super-rich got even wealthier this year.”

MP: The flaw in Robert Reich's analysis is that he is assuming that "the wealthy" in one year are the same exact group as "the wealthy" in a subsequent year. In the baseball example above, it would be like assuming the same 25 highest-paid players in 1988 were the same 25 highest-paid players in 2011, with an income five times greater and a greater concentration of income among the "super-rich." But we know that's not true, the highest-paid players in 2011 are a completely different group than the top-25 in 1988, just like the top 1% of Americans by income or wealth in one year are a completely different group than the 1% in a different year.

Here's more from Kevin:

"When somebody says that the top 1 percent saw its income go up by X in the last decade, they are not really talking about what happened to actual households in the top 1 percent. Rather, they are talking about how much money one has to make to qualify for the top 1 percent. All that really means is that the 3 million highest-paid Americans in 2010 made more money than did the 3 million highest-paid Americans in 2000, the 100,000 highest-paid Americans this year made more money than did the 100,000 highest-paid Americans made in 2000, that the 50,000 highest-paid Americans made more money this year than did the 50,000 highest-paid Americans made in 2000, that the 1,000 highest-paid Americans this year made more money than did the 1,000 highest-paid Americans made in 2000, etc., which is not shocking. But, as the Treasury data show: They are not the same people.

When Robert Reich writes that “super-rich got even wealthier this year,” he is making a statement that is not true in most cases — 75 percent of the Clinton-era super rich were not members of the Obama-era super rich. In fact, Treasury found:

Income mobility of individuals was considerable in the U.S. economy during the 1996 through 2005 period with roughly half of taxpayers who began in the bottom quintile moving up to a higher income group within ten years.

About 55 percent of taxpayers moved to a different income quintile within ten years.

Among those with the very highest incomes in 1996 — the top 1/100 of one percent — only 25 percent remained in the group in 2005. Moreover, the median real income of these taxpayers declined over the study period.

The degree of mobility among income groups is unchanged from the prior decade (1987 through 1996).

Economic growth resulted in rising incomes for most taxpayers over the study period: Median real incomes of all taxpayers increased by 24 percent after adjusting for inflation; real incomes of two-thirds of all taxpayers increased over this period; and median incomes of those initially in the lower income groups increased more than the median incomes of those initially in the high income groups.

Or, as the authors of the study put it: “While the share of income of the top 1 percent is higher than in prior years, it is not a fixed group of households receiving this larger share of income.”

Bottom Line: For Robert Reich to say that "the super-rich got even wealthier this year" implies that the "super-rich" this year is the same fixed group of "super-rich" as last year that are now even wealthier, when that is not an accurate description of reality. It would be like saying "the super-rich baseball players in 2011 got even wealthier than in 1988," without acknowledging that the "super-rich" in 2011 are a completely different group of players than in 1988.

Quote from Hydra: "The distinction is probably lost on a Guy that makes $22k."

The guy that makes $22k this year will not make $22k next year, or the year after that. He will most likely continue to make more money every year, just like the "rich" guy, or maybe he'll make less, just like some "rich" guys.

If you think the guy making $22k should have more money, then you should give him some of yours.

The CPI does not apply to any individual for inflation either but we still use it to determine general inflation. How is the analyzing the top 1% of income earners any different?

I don't think you can mix the terms wealth and income and perform an analysis. I know a lot of high income people that have been high income earners for years that never built any wealth to speak of. It's not so much what you make as what you do with it.

Nowhere did I disagree with the thesis, nor did I suggest that the poor should be given more. You are jumping to conclusions and attributing ideas falsely.

I'm only pointing out how a weak argumet will be perceived by some. The distinction between the common refrain that the rich get richer, and the idea that they aren't the same rich every year is going to be a moot point to some.

That is the audience you have to sell the idea to.

Your position may be right as rain, but a weak sales job won't help it.

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Walt make a point. I know plenty of people with high incomes who struggle every month to maintain a lifestyle. Affluent, but not wealthy.

I posted part of this before, It comes from a friend who is very conservative and very Republican. He makes his living in a high tecdh industry.

"Think about telephone operators. They were once numerous and well paid. Even as direct dialing reduced their numbers there were still 411 operators. Now, there is voice recognition and response software. The change may have made telephony somewhat less expensive and available. However, it also replaced a large number of salaried operators with a very small number of technology company owners with a few programmers and engineers.

IBM's Watson successfully beat the two best Jeopardy players in history. How long will call center agents have jobs when a computer can hear complex questions and answer them better than human experts?

Republicans have a big problem. Namely, the exponential progress of technology all but guarantees that there will be less work required to be done than there are people willing to do it. Yet our whole economic system is based on people getting jobs, getting paid and (hopefully) getting ahead. What do the Republicans say when the jobs just aren't there?

At some point you have to start transferring wealth."

You have have certain ideas you want to sell. Before long you will have to beat Watson to sell them.

Hydra has a good point: what will our response be if the marginal value of the average human drops below that of a robot: we don't seem to be able to generate "knowledge work" jobs for everyone. Will the current social contract still have the same utility.

so an operator loses a job. this brings down the cost of telephony. this results in a savings to all those who use it. this leaves them with more money to spend on other things. thus, that loss a job helps the diner industry or the clothing industry and creates jobs there.

you are making the assumption that the company that puts in an AVR system gets to keep all the surplus, which is not the case at all. most of it accrues to the customers. gross and operating profits at telephony providers have been in decline for years.

this makes your whole argument fail.

instead of accruing benefits to a few capitalists, it accrues benefits to a great many consumers while costing the capitalists more and more money to stand still.

"Yet our whole economic system is based on people getting jobs, getting paid and (hopefully) getting ahead. What do the Republicans say when the jobs just aren't there?"

Our system is not based on spending your entire life working for someone else, though that may be the ultimate outcome for many. It is based on individuals having the right and the opportunity to exploit whatever God given talents that they may have to their own advantage. Job opportunities for others is simply a byproduct of these efforts. Whatever fantasies you and your "Republican" friend may have about technology replacing human creativity, effort and drive are just that, fantasies. Human beings dream, struggle and create resulting in entire industries where none existed before.

The question is whether or not the union/government education monopoly can effectively prepare people to seize the opportunities that present themselves - I doubt it. So, instead of transferring wealth, we need to break the union stranglehold on our schools and allow competition to create a more effective educational system. We need to eliminate the barriers that politicians and lawyers have put up which stifle the creation of small businesses. I have absolutely no doubt that the American people, once freed, will respond by building new businesses and industries.

Walt G: "How is the analyzing the top 1% of income earners any different?"

Democrats use the income statistics to promote class envy. The implication behind their rhetoric is that low income folks are stuck in low income status for all of their lives. That's not always true, of course. Oprah Winfrey was once in the bottom 10%. The purpose of pointing out that the top 1% change is to develop awareness that income mobility is alive and well in the U.S.

"so stop taxing people who would otherwise use the money to grow businesses. reduce regulation, restriction, and governmental crowding out of private industry. leave resources where they are productive."

but all that said, you seem to have a VERY paternalistic view of government. who ever said it was their job to make sure you have a job? do you really want/trust them in that role? can you possibly believe that wealth and prosperity can be created that way?

government does not owe you a living. to claim that they do is the same as claiming that that i owe you a living, as it's my money they are going to take to pay you. beyond the very basics of maintaining law and order and enforcing contracts, there is very little government can do to create wealth of prosperity. only private individuals can do that.

claiming it is the role of government to ensure that you always have a job is philosophically an orwellian level of big brother.

it invite them into everyhting. they will destroy untold wealth by trying to spread it around.

taking from the most productive to give to the least will always result in a smaller pie for everyone.

I agree the top 1% of income earners change, but Reich’s statement that the wealthier get wealthier can also be true. If you are going to say the top 1% dropped in income you will have to see if they also dropped in accumulated wealth. My guess is that a lot of formerly high income people are now low income people but at the same time wealthier. I think high income measured in quintiles is a lot easier to define than rich or wealthy.

The top 1% of any group over time, even if they are not the same people, is just as useful of an indicator for analysis as an index such as the CPI that does not apply to the same people over time.

It comes to this: when society comes to consist of a group of people with assets and a group of people without assets, those without assets must serve those with in order to attain sufficient assets and training to participate as a consumer and entrepreneur. If that option isn't there, because robots have a higher marginal value per cost than people, you will be left with limited options: transferring wealth to the losers in some fashion, or walling them out and shooting them when they rebel. Which will you choose?

Sean says: "If that option isn't there, because robots have a higher marginal value per cost than people, you will be left with limited options: transferring wealth to the losers in some fashion, or walling them out and shooting them when they rebel.Which will you choose?"...

Where do you get this crap?!?!

People can think if they want to and think of a way to enhance their own value by attaining needed skills that there is a market for...

Where do you get this crap?!?!People can think if they want to and think of a way to enhance their own value by attaining needed skills that there is a market for...

Which crap? If your premise is that everyone has some skill sufficient to make a profit on their labor, then you should make a killing by hiring random people and finding something for them to do. My premise is that doing this will continuously get harder as technology improves. Beyond that, what do you have issue with?

Its a dynamic situation, not a static one... I can think of no useful interpretation of this sentence.

that's a ridiculous argument and a ridiculous set of assumptions upon which to base it.

first off, you are talking pure sci-fi. robots are not going to cost effectively replace most labor for a VERY long time. but let's assume they do. if robots are cheaper than chinese manufacturing, then prices are going to drop like a rock. productivity will soar. that means that whatever jobs people can find, their wages will but a great deal more. you are only looking at one side of the equation, which is how you are coming up with such a flawed set of options.

read your ricardo on comparative advantage. even if you are better at making every kind of good in the world than i am, we still both benefit from specialization and trade. robots will not change that.

jobs do not go away just because someone else is more productive. that's not how maximizing the production possibility frontier works.

humans may earn less nominally, but if robots drive the sort of productivity you propose, then real incomes will be protected through price declines.

imagine a world in which one factory can produce 2X more goods than all of the US needs. now imagine a competing factory that can do the same.

how do you think goods would be priced in such a world?

even if these factories only employed 1% of the population, the rest would make a living providing services and inputs. they would be paid little as they would be relatively unproductive, but the thinks they bought would be so cheap that it would not matter. at a price, there is always work for even unproductive workers and it is always more efficient to use them.

thus, your dark future fantasies do not come to pass, nor is there any need for wealth redistribution.

but you still really do not answer the question:

once law is established, the government cannot create jobs, wealth, or prosperity, only destroy them. so why do you want to invite them into that space where they can only do harm? you are pouring water on your head in an attempt to stop drowning.

Robert Reich has long advocated heavy taxation of high income persons. Democrats have long used the high incomes of a few individuals in promoting class warfare. If these folks were fairly presenting the data, I would have no problem with their statements. But they intentionally mislead the public with their selective observations that "the rich get richer", and you know that is true.

Do you believe that high taxation of high income Americans will lead to prosperity for anyone?

first off, you are talking pure sci-fi. robots are not going to cost effectively replace most labor for a VERY long time. but let's assume they do Yes, it's pure sci-fi: an extreme example to illustrate a couple principles. Those principles can be demonstrated outside of extreme examples, but do not dominate.

In this case, what I'm trying to highlight is: 1. The assumption that you have value to add above the costs to maintain you is an assumption of positive absolute value. A sufficiently mentally retarded person already breaks the assumption. I'm trying to show that under certain circumstances, the assumption of absolute value no longer holds.2. The assumption that if you have potential value, you will be able to attract sufficient assets to realize the value and identify and realize a trade based on that value. This is the assumption of demand. I'm assuming if you're happy in your holodeck with your robots, you're not going to answer the door for traveling salesmen.

The Comparative advantage model has at its base an assumption of full employment, which is is indirectly based on the assumptions I provided. If they don't hold, then neither does comparative advantage.

Low costs indeed mitigate the effects of reduced absolute value and low demand. If tossing a beggar a penny feeds them for a month, maybe charity is all that's required and not government intervention. But that's still a transfer of value to those who don't merit it.

If an employer is looking for an accountant why would said employer just hire anyone on the chance that that person might also be a good accountant? They shouldn't. But my point is that you assume demand exists when, in the real world, there is often insufficient demand for a given good or skill. With only a little imagination, you can construct an extreme example where almost no demand exists for a wide variety of things that human beings do. And I believe technological progress is marching us slowly towards that example. That is exactly what prolonged high structural unemployment looks like: longer adjustment periods for every demand shock.

Jet Beagle asked: "Do you believe that high taxation of high income Americans will lead to prosperity for anyone?"

No, I don’t. But I do believe we can identify who the high income earners are in any given year if we do decide to tax that way, and taxes are paid by the year. That income is mobile from year-to-year is not really relevant to yearly taxation.

Wealth accumulation does not necessarily correlate with income, and wealthier people tend to make choices that make them wealthy. Accordingly, Reich and Perry can both be correct with these respective statements: “For 70 years, the wealthy have grown wealthier.” and "Super-Rich Aren't the Same from Year to Year."

The reason I brought up the example of making a killing by doing job placement is that you assume someone else could find a job for a random person when you couldn't do the same (find someone with a demand for an accountant, for example). Job placement firms do exist, and they earn their pay, because find demand for a good or skill is far from trivial.

It is not in context without the comparison of two similar quotes that follow. Simply taking the phrase I don;t understand and repeating it as if it was an insult is a cheap trick that adds nothing to the discussion.

It appears that a smaller and smaller slice of people are winding up with more and more of the total goods produced (whether the same people are in that slice every year or not).

It appears that the results don't fit the theory. Maybe because the improved circumstances predicted are being exported to workers overseas.

So far, work saving machines have resulted in more demand and more work (Jevon's Paradox). But it is still a reasonable question to ask if there isn't some limit.

If I apply power to a ship the power to speed curve is linear, and always has been. But once power becomes cheap enough, and you have enough available, you discover that at a certain point the power to speed curve goes cubic.

It appears that the results don't fit the theory. Maybe because the improved circumstances predicted are being exported to workers overseas. No, the results are fitting the theory just fine. Those with the highest marginal value in capitalism are those that can successfully apply capital. Therefore CEOs, investors, and knowledge workers are doing relatively well. Those who have nothing to differentiate themselves from 5 billion other workers don't do so well. With a high concentration of capital, high-stakes gamblers show up on the radar too. No surprises or theory-breaking here.

So, you do not take isue with the data that says more and more wealth is concentrated at the top, among relatively fewer and fewer people? I'm not surprised by it.

But you need to have capital to apply it. How is this different from just saying the rich get richer. I guess I'm saying it's not that different. After a certain point, your net wealth probably does mostly increase unless you're a big gambler or a big spender, but I'm not at all surprised that taxable income is really bouncy, since all really big income is investment income, and that's both chancy and easy to roll into new investments.

You could take a poll, asking how many readers here, besides yourself, didn't get the point.

==========================

OK, back to square one. The point was that the same people don't show up in the same decile of income every year.

I get that.

What I don't get is how that changes the fact that more and more money is apparently being squeezed into a smaller and smaller group. The pot of money is getting bigger too, so it isn't a zero sum game. But as a percentage more and more of that bigger pile winds up in the hands of fewer and fewer people.

Even if it is not the same ones every year.

I still don't see why that last distinction makes any difference. Please explain.

Lot's of snarky comments and people making fun, but no one says why it makes any difference, really, or as far as the perception that the rich get richer goes.

OK, sometimes some of the rich get poorer. One exception makes a lie out of the perfect or blanket generality. Sometimes the poor get richer, too, but most of them don't, and the generality, generally holds.

You still took my coment out of context. Out of context is not he same as out of the paragraph. And it is still a cheap and obvious trick of argumentation. So is argumentum ad populum.

Excellent comment. Thanks for your clear thinking. The snarkiness around here sometimes brings out the worst in me. I really have to keep that in check ;) But seriously, variation in taxable income among the four quartiles and within the top .1% really doesn't illustrate that much, especially given the vagueness of the summary in the original post.

"Hydra has a good point:"I will assume this is more sarcasm.

I think there's insight to be found in exploring in that direction.

"...what will our response be if the marginal value of the average human drops below that of a robot:"Marginal value to who?

To whom? I was referring to average market yearly labor value. How much money the average person will make in a year under typical conditions.

"...we don't seem to be able to generate "knowledge work" jobs for everyone"

"WE" don't need to.

I keep forgetting: no collective, no social responsibility. I did grow up in a liberal household, I'm afraid. Or did you mean that a high technology society can reach full employment without them?

People have worried about jobs being lost to automation and technology since the beginning of the industrial revolution. In the space of human history, that's a pretty short span. I wouldn't be so sure there's nothing new under the sun here on that basis.

"You still took my coment out of context. Out of context is not he same as out of the paragraph. And it is still a cheap and obvious trick of argumentation."

A paragraph should contain a complete thought, including a topic, supporting details, and a conclusion. That should be the entire context, and that is what I quoted. Your comment contains 6 short sentences like this, that aren't connected in any particular way. If you wish them to be part of one topic, you should include them in a paragraph.

"What I don't get is how that changes the fact that more and more money is apparently being squeezed into a smaller and smaller group. The pot of money is getting bigger too, so it isn't a zero sum game. But as a percentage more and more of that bigger pile winds up in the hands of fewer and fewer people.

Even if it is not the same ones every year.

I still don't see why that last distinction makes any difference. Please explain."

OK, I'll try to explain: There is a wide distribution of incomes in the population. Some are low, some are high. Over time, the distribution has become even wider, so the difference between low and high is greater than before. You might say that "the rich get richer" faster than the poor get richer. Are we good so far?

Now, as there is no certainty as to the relative richness of any one individual over time, you cannot predict with accuracy who will be rich or who will be poor in the future.

If certain individuals got richer while other certain individuals stayed poor, you might complain that life wasn't fair, or that the rich should redistribute their income to the poor for no other reason but to shrink the width of the distribution curve, or some such nonsense.

BUT as this post points out, this is not the case; so to complain, as you do, that: "It appears that a smaller and smaller slice of people are winding up with more and more of the total goods produced (whether the same people are in that slice every year or not)." means that you're unhappy about the width of the distribution, something that's of statistical importance only, and without meaning for any particular individual. Get it?

You might as well complain that the difference between slow runners and fast runners has increased over the last 20 years.

"Except it doesn't seem to be working that way if fewer and fewer pwoplw are getting more and more of the wealth."

Why does it matter how many hands the wealth is in? The nature of wealth is that it is used to produce more wealth through processes that provide jobs and increased wealth for all of us. Those that are good at it, and put their wealth to the best use, will generate more of it. Those who fail to keep up, fall out of those high income "slices".

Surely you must agree that we are all generally wealthier, much better off in almost every way than people were 100 years ago. This is due to the phenomenon that morganovich explained to you, and which you say you understand, but then say doesn't work.

When jobs are replaced by technology, other, usually better jobs appear to replace them. You can point to high unemployment during a recession, but over a long period of time there are not ever larger numbers of people without jobs. The jobs have changed, that's all. All those people who used to work in agriculture found something else to do.

This is not a good argument. Such people have always existed and doubtless always will. We care for those that cannot care for themselves because we are compassionate. Our humanity requires it.

We do, however expect those who can care for themselves to do so.

"The Comparative advantage model has at its base an assumption of full employment..."

No it doesn't. Try this: You are an excellent doctor, and can earn $200k/yr. You are also an excellent office manager, and can earn $60k/yr if you choose that vocation. I am a lousy doctor who can earn $100k/yr, and also a mediocre office manager who can only earn $40k/yr.

As partners, our best arrangement is for me to manage your office, and for you to do the doctoring. Even though you would be a better office manager, the most productive use of your time is as a doctor. Our combined net income is highest with this arrangement. Whether others are employed or unemployed has no bearing.

I meant that I agreed with your comment if I took it literally, with sarcasm=off.

"If tossing a beggar a penny feeds them for a month, maybe charity is all that's required and not government intervention. But that's still a transfer of value to those who don't merit it."

Yes, but the important point is that it's a voluntary action. Most of us are willing to help someone in need without government mandates, even if we aren't sure they deserve it. If you've ever put money in a Salvation Army kettle, or donated food to a food drive, you know it's true.

"Hydra has a good point:"I will assume this is more sarcasm.

I think there's insight to be found in exploring in that direction."

Does that mean you believe that Hydra might actually have a point? Or, do you mean you are being sarcastic?

"Marginal value to who?

To whom?"

Yes, of course, "To whom?" Thanks for the correction. :-)

"I was referring to average market yearly labor value. How much money the average person will make in a year under typical conditions."

Actually the average marginal value of the human [labor] is already lower than that of a robot in every instance where a robot is employed, or else a human - or several humans - would be employed instead.

"I keep forgetting: no collective, no social responsibility."

That's right! And, don't you forget it. :-)

"Or did you mean that a high technology society can reach full employment without them?"

Actually, I meant both those things. It isn't our responsibility, but that of those who need the jobs, to acquire the nescessary skills and find employment. This is something people are very good at, by the way. We need not consider them helpless children. Jobs will be created as new enterprises require them, and those who are prepared will fill them.

Other than during times of recession, when resources need reallocating, full employment, as we define it, generally exists. This, despite phenomenal advancements in technology and productivity.

"People have worried about jobs being lost to automation and technology since the beginning of the industrial revolution.

In the space of human history, that's a pretty short span. I wouldn't be so sure there's nothing new under the sun here on that basis."

Anything's possible, but so far, worriers have been proven wrong every time. I see no reason to think differently now. Jobs are lost, jobs are created. Mostly, it seems, newer jobs are better jobs.

If you could travel back in time 100 years, and asked people what types of jobs they imagined would exist in the 21st century, what do you suppose they would say?

"When Robert Reich writes that “super-rich got even wealthier this year,” he is making a statement that is not true in most cases"

How can it not be true when the richest 1% have 42% of all non-home wealth and the top 20% have 93% of all non-home wealth and trends show yearly increases? (Source: Wolff from Working Paper 502, The Levy Economics Institute of Bard College, from 1983, 1989, 1992, 1995, 1998, 2001, and 2004 Survey of Consumer Finances (SCF) conducted by the Federal Reserve Board)

I think we have two questions here: 1) Are the rich get richer? And the answer seems to be yes and 2) who is going to pay for what? And the answer is controversial and depends on whom you ask.

There is one thing for sure, you cannot get money from those who don't have any after paying their other taxes and paying for the basic requirements to survive and raise a family. If you mix in a budget heavy in entitlements with little discretionary outlays and increasing deficits you will require new revenue sources without any alternatives. I can already feel the hands in my pockets coming after what I worked two jobs for over 30 years to save.

Does that mean you believe that Hydra might actually have a point? Or, do you mean you are being sarcastic? I mean that if it's really the case that the members of richest .01% (by income) of the population are rotate among the rest of the top 1%, the rich are still getting richer far faster than the rest of the population. No real defense of the propositions that 1) Any poor person can become rich by virtue of their actions2) Those who are rich have done so by virtue of their good actions and practices are offered here. That is, if you don't think the current income distribution is "fair", this data will not convince you. The fact that there is mobility among the 95% that own half or so of the nation's wealth is encouraging for someone like me, but not for those that think high wealth concentration is corrosive or who envy the rich specifically.

Dr. Perry's arguments elsewhere that the richness of the rich is actually beneficial to the poor are a far more powerful defense of our capitalistic system than this.

Actually the average marginal value of the human [labor] is already lower than that of a robot in every instance where a robot is employed, or else a human - or several humans - would be employed instead. Thank you. In other words, where robots can replace humans, they do. If robots could replace humans everywhere, they would. It's hard to know when we will be able to replace people with robots that can do most of what we can, but it will most definitely happen.

f you could travel back in time 100 years, and asked people what types of jobs they imagined would exist in the 21st century, what do you suppose they would say? We don't have to travel back in time: we have a record of popular fiction. And the answers range all over the map, from working for our robot or corporate overlords, to being overlords over our own armies of robots, each of us a scientist or an artist. If you look at their predictions, mostly what they got wrong was that they thought in biological terms about what was hard and what was easy: things that people could do were easy, and things people couldn't do were hard. With robots and logical machines, the reverse is true, but that continues to change. As an expert in computers, I can tell you that we still haven't seen anything yet in terms of how real computing power and manufacturing prowess can change our society. But all the arguments about where the benefits of technology would go are as valid today as they were 100 years ago.

Some of the rich from this year will be very poor the next. Their place will be taken by other people who became rich. Because of that mobility, which is much higher in the US than in places like the EU, it is easier for Americans to become rich. Why is that a problem? And if we are talking about a different group, how can you we try to pretend that it is the same people?

"Why is that a problem? And if we are talking about a different group, how can you we try to pretend that it is the same people?"

It doesn't matter. Don't try to confuse me with facts and logic. The fact that any other person has more than I do, is just wrong! They have gotten it unfairly, and don't deserve to keep it. They must be punished with ever more burdensome taxes. Some of their wealth and income must be redistributed to me.

Those who call for taxing the rich seem to mean someone who has more than themselves. They seldom think that some of their income should be redistributed downward.

Soon after the 2008 election, I asked a waitress, an apparent Obama supporter, what she thought of Obama's plan to "spread the wealth". She indicated she was all in favor. I then told her I was glad she approved, as I planned to help in that effort, by giving her tip to the homeless guy outside.

This misses the point. It remains true that for a given set of people with productive capabilities, the greatest overall production capacity (and therefore lowest prices) will result from those with the greatest capacity doing what they are best at, and so on. But if I could make $100K as a doctor and was unworthy of hire as an office manager, but you could make $120K as a doctor and $60K as an office manager, our combined best arrangement would be if I were a doctor and you an office manager if the market for doctors only allowed one of us to enter. Of course, this is a ridiculous case, but it illustrates the point: if your are replaced in your job but get a worse one, the system is still better off. If you are replaced and remain unemployed, the system may be worse off. This is not the common case, but it is not impossible.

The percentage of accumulated wealth in the U.S. is sharply trending from the 35-55 to the 55-and-over age group. At the same time, income increases are flat over the last 20 years for the bottom four income quintiles. I wonder where the money will come from for all the expensive program? I would expect some sights are set for the 55-and-over group's investments and the top quintile of incomer earners' income regardless of who makes up that group in any given year.

Actually the average marginal value of the human [labor] is already lower than that of a robot in every instance where a robot is employed, or else a human - or several humans - would be employed instead. Yes, so if robots could replace humans on a broader basis, they would. The assumption that we will find new productive things for those humans to do assumes that there exists a non-saturated market where human capability per maintenance cost exceeds that of a robot. It really is possible for humans to become obsolete, although not in the forseeable future.

If you could travel back in time 100 years, and asked people what types of jobs they imagined would exist in the 21st century, what do you suppose they would say? Popular fiction records the answers, and they are all over the map. The biggest predictive mistakes have been not understanding the power of information storage and communication, not discovering a cheaper way to make things fly, and thinking that what is easy for humans ought to be easy for robots. In fact, robots and humans follow a substantially different path of evolution, but I guarantee you that we have only scratched the surface of what technology and robots can do for us. And 100 year-old logical arguments about where the benefits of technology are still valid: it's just that many of the premises are wrong. Adjust the premises, and the models still work.

"But if I could make $100K as a doctor and was unworthy of hire as an office manager, but you could make $120K as a doctor and $60K as an office manager, our combined best arrangement would be if I were a doctor and you an office manager if the market for doctors only allowed one of us to enter."

That's correct. That is the ONLY arrangement that allows both of us employment in medicine. It also assumes that no other office managers exist, or you could hire one, then support me as a welfare recipient and medicaid patient.

In this scenario, you mention 'entering' the market, so I assume we are both newly minted, and have never practiced medicine. Your last paragraph refers to losing a job, so I assume that the last remaining office manager has retired or passed on, and the market for medical service has shrunk. If that's the case, one or both of us should have been preparing for today by learning new skills, and someone else might have forseen the fast approaching golden oportunity of becoming an office manager.

As there are two doctors, but only one office manager, perhaps that would be the more valuable skill. I could demand the $100k, and leave you with $60k.

As there are two doctors, but only one office manager, perhaps that would be the more valuable skill. I could demand the $100k, and leave you with $60k. I specifically excluded this case, and that (and the inability to retrain) are why I said it was a ridiculous scenario. But these ridiculous scenarios help one understand and quantify non-dominant effects within an economy, those things that tend to get waved away as not real, but which are simply weak effects. However, I posit that there are plausible futures where effects currently weak can become far more visible. It won't be in my lifetime, but that doesn't mean it's uninteresting :)

"The assumption that we will find new productive things for those humans to do assumes that there exists a non-saturated market where human capability per maintenance cost exceeds that of a robot."

Well, we may not, but I'm sure the humans who feel the need will find new productive things to do. Keep in mind that as less human labor is needed, the prices of things will decrease until at that point where no more human labor is needed, every thing will be free.

"It really is possible for humans to become obsolete, although not in the forseeable future."

Anything is possible in the future, but as I see no trend like that now, I can't worry about it.

"In fact, robots and humans follow a substantially different path of evolution, but I guarantee you that we have only scratched the surface of what technology and robots can do for us."

Keep in mind that as less human labor is needed, the prices of things will decrease until at that point where no more human labor is needed, every thing will be free. This is where morganovich left the argument. They will never be free because the resource capacity of the Earth is limited. It's very large, and as long as the human population is limited, we'll probably be fine. But essentially, you'll have the case where if you own land and robots, most things are virtually free, but if you don't, everything is virtually inaccessible. As long as birth rates are reasonable and we get a handle on fixing genetic diseases, things should be ok. There's been a lot of science fiction written that touches on what that means.

"I specifically excluded this case, and that (and the inability to retrain) are why I said it was a ridiculous scenario."

I guess I missed the part where you excluded that case. If you mean people doing what they are best at, then you're correct. I suspect, however, that we have really been talking about doing what is most valuable, as measured by what others are will ing to pay. In that case, the office manager job might become the most valuable. I also might be more proficient as an office manager than I am as a doctor, even though doctoring appears to be the more valuable job.

But you're right, it is a ridiculous case.

I suspect that what you call weak effects, are in reality a result of imperfect knowledge.

By the way, as we speak of hypotheticals with limited conditions, keep in mind that no one has suggested that a totally free market is perfect, only that history appears to show that the closer we get to such a condition, and the more people are free to make their own choices, the better off everyone becomes. More so than with any other system we know of.

"They will never be free because the resource capacity of the Earth is limited. It's very large, and as long as the human population is limited, we'll probably be fine."

You may have noticed that as people become wealthier, and their standard of living improves, two important things happen: they have fewer children, and they become more concerned with their environment. You see lower birth rates, and more demand for clean air and water, and conservation of natural resources in rich countries, not poor ones.

In fact, as an SF fan, you must have encountered the notion that the Earth itself may not be a limiting factor.

"...But essentially, you'll have the case where if you own land and robots, most things are virtually free, but if you don't, everything is virtually inaccessible."

I don't see this being consistent with human nature. Have you noticed that when people become wealthy beyond anything that's meaningful, they start giving things away? Think of the so called "robber barons", and these days, people like Gates & Buffett. When any imaginable want is easily met, being rich no longer has any meaning.

When future prices approach zero, I can imagine a world of haves and have-nots in which some are as rich as Gates, while others are as poor as Michael Jordan.

Incidentally, in his highest earning year, MJ made more than all US Presidents combined had made, in total, since 1789. However, he would have had to make that same amount, and save every penny of it for 250 years, to have a net worth equal to that of Bill Gates.

"As long as birth rates are reasonable and we get a handle on fixing genetic diseases, things should be ok."

You're aware, aren't you, that reducing birth rates and eliminating disease are opposing forces as to population size.

"There's been a lot of science fiction written that touches on what that means."

Yes, I know. I've read a lot of it. Great stuff. I discovered SF as a teenager, and my library card became a permanent pass to other worlds.

The percentage of accumulated wealth in the U.S. is sharply trending from the 35-55 to the 55-and-over age group.

IIf you are the normal American you see a steady increase in income as you get older until you get to around 45. The average employment income is highest among the 45 to 54 age group and declines from there as you get older. If you are rational you will start preparing for retirement during this period of high earnings. By 45 the kids should be old enough to have part time jobs of their own and the house should be mortgage free.

But Americans did not do this. Their savings rate peaked in 1980 around 13% and began to go down until it finally went under 3% in the 2000s. And when recession hit in 2000, instead of doing what they had always done before and save more of their income they went out and borrowed as much as they could to finance a consumption binge of huge proportions. This was self inflicted and driven on by the Fed and Treasury, who conspired to game the system to prevent a recession from liquidating malinvestments. It had nothing to do with 'the rich.'

At the same time, income increases are flat over the last 20 years for the bottom four income quintiles.

Two things.

First, the bottom quintiles are not constant. People move in and out of a particular group when they change their earnings levels. Most people who are in the top quintile today were in the bottom half twenty to thirty years ago. So that pig won't fly.

Second, to have a higher wage level you need higher productivity, which requires capital accumulation, which in turn requires profits. And there is a problem there because corporate profits as a percentage of GDP have been falling since the early 1960s. I don't know how you guys missed it but the US economy has gone through a STRUCTURAL transformation which has hollowed out the capital that once put the country so far ahead of all other nations. It is hard for workers to get real wage increases unless there is capital accumulation and you can't have that without savings and profits. That too is not the fault of 'the rich' but lies at the feet of the Fed and Treasury.

I wonder where the money will come from for all the expensive program?

I know. Bernanke will print as much as he can get away for as long as foreigners continue to hold their reserves in USDs. He will sacrifice the USD to keep the country from defaulting again.

I would expect some sights are set for the 55-and-over group's investments and the top quintile of incomer earners' income regardless of who makes up that group in any given year.

I am counting on it. There are too many malicious weasels around who think that they can get rich by making others poorer and they will vote for politicians that keep promising free lunches and gain without pain and sacrifice. While that is terrible for Americans it is a wonderful opportunity for people who see and understand what is really happening.

Try it this way. Draw a curve on a sheet of graph paper that represents the distribution of wealth. As you increase the curvature more of the area winds up under the curve at the extreme right and every body else has less. That does not happen because the total wealth area under the curve is not constant.

Even so, you still cannot continue to increase the curvature. No matter how much new area is added, more and more of the new total winds up under the curve at the extreme right.

Even if it is true that those on the left are twice as well off, they are not going to see it that way. And there is the real problem.

You see lower birth rates, and more demand for clean air and water, and conservation of natural resources in rich countries, not poor ones. True, and this does bring me hope.

In fact, as an SF fan, you must have encountered the notion that the Earth itself may not be a limiting factor. Yes, but I'm also a firm believer in the theory of relativity. I really don't think Hyperdrive will ever work, so that places limits on things like Interstellar trade to solve resource constraints.

When future prices approach zero, I can imagine a world of haves and have-nots in which some are as rich as Gates, while others are as poor as Michael Jordan. And many of the MJs will by bitterly jealous even so. :)

You're aware, aren't you, that reducing birth rates and eliminating disease are opposing forces as to population size. Yes, but start applying a Darwinist context to a world with 2 children per pair of Monogamist parents (big assumptions, I know) and you *need* the ability to clean up genetic junk just to keep all the health problems in check. As a non-dominant species in a great big world, you have as many kids as you can support with the smartest and healthiest mate(s) you can find and let God sort them out. Somehow I don't think that will fly.

Yes, I know. I've read a lot of it. Great stuff. I discovered SF as a teenager, and my library card became a permanent pass to other worlds. Ah, then another book you may want to consider is "On Basilisk Station" by David Weber. It's a free download at baen.com :)

Most people in the bottom quintile were in the bottom quintile 30 years ago. Those who were not were probably in the middle until some health crisis bankrupted them. Very few in the bottom quintile got there from the top.

Sprewell,Sean, is that we make all that stuff cheaper still in 30 years, not to mention all the new stuff we'll invent, and we're worse off? That's just crazy talk.

I don't believe in straight extrapolation as a strong form of argument. As an engineer, I'm well aware of the fallacies that arise from using statistics rather than reason. Most of us would clearly be much better off, but the argument was about society's losers. Supporting them would be dirt cheap, but who would pay? What job could they do to earn their keep?

Sean, we are all extrapolating, some of us just do a better job at it. ;) I suggest you're not using much "reason" here, simply assuming an extreme and then not factoring in the actual economics of even that situation. If you're worried about society's "losers," what happened to all of the losers from the past? A century ago, we all washed our own clothes by hand or paid someone to wash them for us. Now, almost all of us have washing machines. What happened to the clothes-washing losers? Are you saying they were all inarguably worse off as time went by and weren't able to transition to anything else? Nobody has to "support" the "losers," they will just do something else, as they have always done. If robots take over all the sewing jobs, the displaced will start making the patterns. Maybe the overall human hours worked goes down, but we'll split it up more evenly so that each person has more leisure time, just as has been happening for the last century.

As for the current supposed rise in income inequality, the market adjusts. The top 1% are primarily information workers, like financiers or engineers or doctors, who benefit temporarily from using the new information tools better or earlier, before they get destroyed by better software and a wider market. I'll be using medical diagnostic software from India, which will refer me to a Chilean doctor over video conference for the few conditions the software can't handle. All work is about to be affected by tech, but bringing the costs of finance or medicine or tech down only means the consumer has more money to spend elsewhere. :)

"Most of us would clearly be much better off, but the argument was about society's losers. Supporting them would be dirt cheap, but who would pay? What job could they do to earn their keep?"

Family, friends, neighbors, community would support them if it was dirt cheap. Just as they do now when it's not cheap. I would pay $10/mo to support my neighbor because I like the people, and would prefer they live there than someone I might not like.

Here's how one future "poor" person helps these even less fortunate than himself.

If we don't allow people to simply perish by the roadside today, why do you think it would happen in the future when it's much easier to prevent?

If there are people who need jobs, then jobs will exist. When there are no jobs left, it will be because no one needs one. Prices will have reached zero.

Perhaps I am such a perfectionist, that even my top of the line lawn mowing robot doesn't mow my lawn quite evenly enough. I can hire a human, and provide them with manicure scissors and a ruler so that they can finish the job. I can pay them $1 which will support them for a week.

No charity here, you slackers. If you want to eat, you will have to work.

"Most people in the bottom quintile were in the bottom quintile 30 years ago. Those who were not were probably in the middle until some health crisis bankrupted them. Very few in the bottom quintile got there from the top."

Support this nonsense with something believable, would you?

Do you really believe that young people just out of school, who make up most of the bottom quintile, seldom improve their lives by age 50?

"Again, I don't disagree. But if this were the case, all the runners would be faster."

All the runners ARE faster. The slowest now runs at 8mph instead of 6. The Fastest now runs at 16mph instead of 12. Everyone has gotten faster by 1/3, but the spread between slowest and fastest has increased from 6mph to 8.

If you don't disagree, why do you question whether that's the case? If you DO disagree, why don't you explain why?

"At the same time, income increases are flat over the last 20 years for the bottom four income quintiles."

Vange, I don't know about flying pigs, but it would not matter if they are the same people every year for taxing purposes because people get taxed every year. I agree people move in and out of the quintiles. The IRS does not care whose name is on which tax return in which year.

Look, if you want to get real money you have to go where the money is at. The data show that's the 55-and-over age group for wealth and the top quintile for income. I understand sharing the pain with all and everyone paying their "fair share", but the discretionary cash is at the top.

If you want to catch fish, you have to go where the fish are at, so there is a rational side to this idea of redistribution of wealth. That does not mean I like it because I am going to be one of the fish, but I will work at sheltering as much wealth as I can from taxation as I did yesterday.

Even granting the pie is bigger, it is hard to see how the present trend can continue.

The trend that you see has been caused by the intrusion of government into the markets. Instead of allowing people to pay for the mistakes they made in the markets government bailed them out. That allowed many people who should have been a great deal poorer to remain among the richest 1% and made it difficult for those that were prudent to move up.

The solution is to get government to stop intervening and to stop bailing out bad decisions at all levels of society.

Even if it is true that those on the left are twice as well off, they are not going to see it that way. And there is the real problem.

You are arguing that the problem is not one of real conditions but of perception. What is your solution to this problem? That we make society poorer but to make sure that the richest fall more in proportion? How does that help anyone?

You see lower birth rates, and more demand for clean air and water, and conservation of natural resources in rich countries, not poor ones.

True, and this does bring me hope.

Let me throw some cold water on the lower birth rate part. Western societies have set up pay-as-you-go pension systems that cannot survive a low birth rate situation. Lower birth rates without massive immigration increases will mean insolvencies for Medicare and Social Security. While that would be good over the long run I do not believe that was part of the 'hope' that is being discussed.

Most people in the bottom quintile were in the bottom quintile 30 years ago.

That is not true. But we can certainly argue with certainty that most people in the upper half were in the bottom quintile because they had to start with little money and work to build their net worth as they got older. That includes me and most of my friends. We were not born rich or given a lot of money by our parents. We started off with little money and had to earn our wages by improving our skill sets and selling our labour to companies that bid for our services. By working hard, saving, and investing we kept moving up until we hit our peak wage earning years. After that our primary way of increasing our earnings came from the savings that we had invested. No savings meant no increase in earnings above what we could get from our employers. If we accumulated no savings and made no investments that was a path that we chose and certainly cannot blame on the 'rich'.

Those who were not were probably in the middle until some health crisis bankrupted them.

That is not true either. Very few people are bankrupted by health issues. It is hard to blame bankruptcy on health when most of your life was devoted to borrowing and consuming and you ignored savings. If we define the third quintile as the middle the data shows that only around 10% of those who were in the middle in 2001 fell to the bottom quintile in 2007. (Reference below.)

You are missing his point. Making people poorer, which is what the economic polices that people like you advocate would do, make conservation far less likely. If you care about the environment you want to see a richer, not a poorer world.

I don't believe in straight extrapolation as a strong form of argument. As an engineer, I'm well aware of the fallacies that arise from using statistics rather than reason.

But you are not using reason. If everything becomes much cheaper real wages can go up even if the compensation rate falls. This is what happened during the 19th century. Prices collapsed while wages were stagnant of fell slightly during most decades during which there was no war. People were much better off and the standard of living exploded.

Most of us would clearly be much better off, but the argument was about society's losers. Supporting them would be dirt cheap, but who would pay? What job could they do to earn their keep?

Look to the past. Without subsidizing bad behaviour there would be fewer losers. Those that ran into back luck would be taken care of by mutual societies, local church groups and social organizations and other institutions that developed to take care of the unfortunate. There would be fewer 'losers' and it would be a lot cheaper to look after them because they would be given opportunities to dig themselves out of the hole they were in if they were capable of doing so. In such a society there would be fewer able bodied unemployed.

Vange, I don't know about flying pigs, but it would not matter if they are the same people every year for taxing purposes because people get taxed every year. I agree people move in and out of the quintiles. The IRS does not care whose name is on which tax return in which year.

You are missing the point. I am not saying that people do not improve their lot in life as they get older and improve their skills. (See postings above for examples.)

What I am saying is that the average individual is not doing much better than his counterpart of a generation ago when it comes to real wages. That is because there has been no material capital in the US economy. That was driven by a structural change to a consumption based economy and to a decline of corporate profits as a percentage of GDP. Without substantial capital accumulation in the general economy it is hard for the average American worker to see a real increase in his pay. In the case of the US we saw some sectors stay profitable and increase capital investments. They have seen a real increase in wages and the workers who were left did well. But the economy has changed and there hasn't been much capital accumulation overall with depreciation running about even with new investment (or higher) for decades.

The average family has done better because of the falling import prices, the destruction of margins in the distribution channels (thank you Wal Mart), and because more Americans work longer than ever before. I would say that the STRUCTURAL problems are not being addressed today and voters have no desire to see them being addressed. They would rather look to blame someone for their own stupidity because they do not want to think about the old adage that we all get what we deserve.

Look, if you want to get real money you have to go where the money is at. The data show that's the 55-and-over age group for wealth and the top quintile for income. I understand sharing the pain with all and everyone paying their "fair share", but the discretionary cash is at the top.

But it is not REAL money. It is make believe paper money that is created out of thin air. If the government attacks the 'rich' who create most of the wealth and invest most of the capital in the US you will see foreigners who are nervous about the purchasing power of their reserves ask for a much higher interest rate, which will destroy many of the people in the lower quintiles as they see what is left of the equity in their homes get wiped out (in real terms) and have to pay higher prices with depreciated savings. (If they have any savings.)

If you want to catch fish, you have to go where the fish are at, so there is a rational side to this idea of redistribution of wealth. That does not mean I like it because I am going to be one of the fish, but I will work at sheltering as much wealth as I can from taxation as I did yesterday.

Perhaps my inability to be more articulate or my haste in composing these responses has caused people to miss the points that I am making. I merely point out that the type of tax farming that is being proposed to fund the redistribution schemes will not work because it will produce far less revenues than the proponents expect even as it discourages capital formation and investment. That wold destroy the USD and put the US into a hole from which it can never climb out without declaring bankruptcy.

But you are not using reason. With all due respect, my reason in this matter has been superior.

If everything becomes much cheaper real wages can go up even if the compensation rate falls. I acknowledged this, but you missed my point.

Those that ran into back luck would be taken care of by mutual societies, local church groups and social organizations and other institutions that developed to take care of the unfortunate. This is probably the right answer.

In such a society there would be fewer able bodied unemployed. The point is that what "able-bodied" really means could change drastically in the face of real robot competition. This is what you missed.

Lower birth rates without massive immigration increases will mean insolvencies for Medicare and Social Security. Agreed, but that's actually in a shorter time frame than I was speaking about: this is a problem I will live to see. And it will be a serious problem.

Nobody has to "support" the "losers," they will just do something else, as they have always done. You keep missing the point. The reason humans and machines have coexisted so well is that what is easy for humans has been hard for machines, and vice versa. But there is a point in computational density called the Singularity where computers will achieve the same rate of calculation as the human brain (we're currently approaching the computational level of a bug or something like that - I can't find the graph right now). With a good artificial intelligence and cheap manufacturing, a robot could theoretically do everything a human could do and more. Humans couldn't simply "move up the chain": they're whole value proposition would be the ownership of technology. Even before this point, there may be people that are completely unemployable. Don't tell me such people don't exist: I've met them, mostly people with mental illness. What it means to be "able-bodied" and of "sound mind" may change: the bar may go up.

"Lower birth rates without massive immigration increases will mean insolvencies for Medicare and Social Security. While that would be good over the long run I do not believe that was part of the 'hope' that is being discussed."

Well, as I don't hear too many calls for massive immigration, especially along the US southern border, and I can't imagine even the current administration calling me to my patriotic duty to have more children, the solution seems obvious.

Look to the past. Without subsidizing bad behaviour there would be fewer losers. Those that ran into back luck would be taken care of by mutual societies, local church groups and social organizations and other institutions that developed to take care of the unfortunate. There would be fewer 'losers' ....

I paid for health insurance for 25 years (along with my employers) yet when I got sick enough to need it, I suddenly had none and could buy none. I bought insurance for my wife and paid for it for 18 months only to have it rescinded retroactively, without so much as a reson why.

This is the kind of crap that theoretically courts would solve. In reality, government power is not the only concentration of power to be feared.

Agreed, but that's actually in a shorter time frame than I was speaking about: this is a problem I will live to see. And it will be a serious problem.

Sorry that I was not being clear. I agree with your general optimism but point out that there is a lot of pain between where we are and where you envision us going. Sadly, things may be a lot worse than I thought.

That is not true. But we can certainly argue with certainty that most people in the upper half were in the bottom quintile because they had to start with little money and work to build their net worth as they got older. That includes me and most of my friends.

============================

Me too, I worked my way up. I don't argue witht the second part of this. But I have a problem with the first sentence. You say it is not true, and offer no evidence.

People I know who are my age who are in the bottom quintile have beeen there forever. None of my millionaire friends have wound up in the bottom quintile, not even the ones who inherited everything, and are of very modest persoanal achievements.

You said my statement is otrue, then you changed the subject entirely. I still maintain that those in the bottom quintile are likely to have always been there, unless they got sent there through health issues.

"But there is a point in computational density called the Singularity where computers will achieve the same rate of calculation as the human brain..."

We may be using different definitions for the word calculations', but as I see it computers are already faster than humans. My pocket calculator is much faster - and more accurate - than I am. In that sense, my cell phone is smarter than I am.

"With a good artificial intelligence and cheap manufacturing, a robot could theoretically do everything a human could do and more."

I'm not well versed on the subject of AI, but as I see it, a number of obstacles need to be overcome before machines can replace humans as 'top dog'.

Machines need to be able to reproduce themselves, and evolve something new not provided to them by human developers.

They need to 'imagine' something new.

They need to 'think' in ways that humans think, that aren't yet well understood, relating to our physical needs and wants. Something machines don't share. This includes the ability to think & act emotionally and illogically.

They need to develop 'intent' and self determination.

They need develop an 'understanding' that they might be acting at odds with human interests, anticipate human actions such as attempts to "press power off", and act to prevent them. I say develop, because humans wouldn't likely provide them with this capability.

Perhaps these objections have already been overcome, and if so, I would love to hear the answers, as I'm unaware of them.

You keep missing the point. The reason humans and machines have coexisted so well is that what is easy for humans has been hard for machines, and vice versa.

OK. Let us see where you move the argument.

But there is a point in computational density called the Singularity where computers will achieve the same rate of calculation as the human brain (we're currently approaching the computational level of a bug or something like that - I can't find the graph right now).

I am sorry but I don't buy this point. Our brains are complex systems that took millions of years to develop as they did. Computers are far from where they need to be before they can do what a human brain can.

With a good artificial intelligence and cheap manufacturing, a robot could theoretically do everything a human could do and more.

Theoretically. And thirty years I was told that with the development of fusion, which was just around the corner, we would theoretically have nearly free energy.

Humans couldn't simply "move up the chain": they're whole value proposition would be the ownership of technology.

You have to be clearer because you may be losing people at this point. You certainly are losing me.

Even before this point, there may be people that are completely unemployable.

Really? The desire of people is infinite. You want to wash my car or paint my house? No problem. At the right price I will hire you. There are many people who do not work today. The reason is not because they are unable to work but because they are subsidized for not working by one set of regulations while they are priced out of the labour market by another. We do not have to blame robots or technology for the problem because the cause, as usual, is government intervention into voluntary transactions.

Don't tell me such people don't exist: I've met them, mostly people with mental illness. What it means to be "able-bodied" and of "sound mind" may change: the bar may go up.

You mean to tell me that most of the people who are not working are mentally retarded? Sorry but you have no evidence to back up that claim. If anything, better nutrition and care has reduced the number of people unable to work for physical or mental reasons to levels below those when society was able to handle their care without any government meddling.

Actually, it isn't. You seem to be totally unaware of historical examples that answer the questions that you bring up.

1. Reason and knowledge are completely separate things. Being unaware of historical examples is not a flaw of logic.2. I thought I made it clear *exactly* why those examples do not apply. "95+% of People have always found other ways to contribute" is a true statement. "People will always find other ways to contribute" is only an assumption that will never change. I pointed out a scenario that brings that assumption into some reasonable doubt based on extensive understanding of what computers can do, have done, and will do in the near future. And then I pointed out some potential consequences.

There is absolutely nothing wrong with that chain of reasoning as long as I don't press my case beyond the point of speculation. You're a smart guy who knows a lot, but there's if there's a *logical flaw* there, no one here has found it. Don't let your philosophy interfere with your analysis.

There are many areas of real life where robot competition will not make sense no matter which techno-utopian dream scenario you bring up. Excepting people wanting sexual or psychological connections with other human beings, I can't think of any.

This does not change the drag on society, it only makes it voluntary, allowing those who think such people should not be cared for to become free riders.

They are not 'free riders' because they have no obligation to look after people that they do not know or may not even like. Are atheist Bahamians free riders because the religious community donates clothes, food and very cheap housing for the poor? Would the poor be better off if the state muscled in on the churches?

I don't think the guy on the bottom who is either stagnant or being squeezed out is going to be too concerned about the nicety of whether the rich who are getting richer are the same ones every year.

The problem is still all about perception rather than the reality and according to you truth does not seem to be relevant. So what is your solution to the problem? Force the rich to take an Atlas Shrugged approach and go on strike? That would just be great for the poor and your failing society.

I take it, then, that you now agree that the rich are getting richer in a way that cannot continue.

No. I said that many of the present day rich only escaped huge losses because your government under Bush and Obama bailed them out. I am also saying that much of their wealth is illusion because in a world where their holdings are denominated in USDs they are not as rich as you believe they are.

I am arguing that the US itself is on the precipice and in danger of a serious collapse. It was both the Democrats and Republicans who got it in the bad position that it is in and no amount of redistribution or social re-engineering will change the reality.

Your argument now is that rather than have the government screw things up or intervene in wealth transfer, we should just let individuals screw up and capitalize on that for transferring wealth.

No. My argument is that what belongs to you should be yours to allocate or misallocate and that you are in a better position to figure out what you want or need than some idiot in Washington looking to buy himself another election.

Maybe, but a large percentage of bankrupticies involve medical issues.

Medical issues are usually not the driver. They are usually the last straw.

And you are talking to tghe wrong person to make that argument. I saved well and borrowed little, and I was still very nearly wiped out by an illness in my late forties.

You obviously did not plan very well. Don't you know that there is such a thing as catastrophic insurance to make sure that you can't get wiped out by an illness?

A savings plan for catastrophic illness is a pipe dream, as is actually buying insurance when you need it.

You don't seem to understand the meaning of the word insurance. You buy it before you 'need it' to deal with a catastrophe, not after.

I paid for health insurance for 25 years (along with my employers) yet when I got sick enough to need it, I suddenly had none and could buy none.

You failed to plan properly. Insurance companies cannot cut you off if you have paid your premiums.

I bought insurance for my wife and paid for it for 18 months only to have it rescinded retroactively, without so much as a reson why.

No respectable insurance company rescinds policies retroactively and takes on the legal and publicity risks, especially in a place like the US where lawyers are lining up to take a bite out of companies with deep pockets.

You cannot sell that argument to me. I have real life personal excperience that says it can't work, except for the very wealthy.

Sorry but you can't sell your claims to me because there is such a thing as contract law. If you complied to your end of the bargain the insurance company has to meet its obligations.

Theoretically. And thirty years I was told that with the development of fusion, which was just around the corner, we would theoretically have nearly free energy. The difference here is that we have a measurement of actual progress towards the path. Here's something I googled for a chart the equivalent of which I was presented with in an Intel tecnhology forum:http://www.transhumanist.com/volume1/moravec.html

Of course, raw compute power is only one aspect. It may easily take 100 years to build Asimov's fully functional mechanical man, but I am convinced that it is inevitable that one day we will be able to do so if we choose. At some point it may even become economical.

Really? The desire of people is infinite. You want to wash my car or paint my house? No problem. At the right price I will hire you The desire of people to have more power over their environment is infinite. The desire of many people to consume is bounded by their desire for security. This is demonstrated by the fact the people have savings. I don't care what you have for sale: I won't spend every last dollar to buy it. What's more, price matters. A human can't charge less to do a job than it will take him to live on. I believe Adam Smith figured this would determine the minimum price of labor. But if you're competing against technology, there is no guarantee that the minimum you could live on would be cheap enough to compete against someone with the right tools: you might need non-trivial capital along with your native capacity. Right now, all this stuff is in the noise as far as its ability to prevent employment, and I suppose that may continue.

You mean to tell me that most of the people who are not working are mentally retarded? I was referring to a person I once knew who I am sure is mentally ill (but not retarded). But no, I am not saying that. I am only saying that unemployable people exist, not that most unemployed people are unemployable.

"I dont have to disagree to see that you have made a weak defense of the issue.

I'm a scientist, not a policy wonk."

LOL

Your ignorance never ceases to amaze.

You really should reread the series of comments you intend to respond to BEFORE you actually do so, to make sure your response makes any sense.

Here's my analogy, which you said you liked:

"You might as well complain that the difference between slow runners and fast runners has increased over the last 20 years."

But then, you raised an objection. I'll repeat it here, as I see you've forgotten it. The emphasis is mine. That sure looks like a disagreement, or at the very least a strong objection.

"Again, I don't disagree. But if this were the case, all the runners would be faster."

Realizing that this resulted from your muddled thinking, to which I have become accustomed, I carefully explained the analogy using numbers:

"All the runners ARE faster. The slowest now runs at 8mph instead of 6. The Fastest now runs at 16mph instead of 12. Everyone has gotten faster by 1/3, but the spread between slowest and fastest has increased from 6mph to 8."

As I'm already aware that you are a "scientist" (snicker, snicker), I felt sure that the use of numbers to illustrate my example would dispel your confusion, but I see I was wrong.

There is no "policy" involved in my analogy, or in the original subject of income distribution, so what the eff are you talking about?

The difference here is that we have a measurement of actual progress towards the path. Here's something I googled for a chart the equivalent of which I was presented with in an Intel tecnhology forum:http://www.transhumanist.com/volume1/moravec.html

Measuring transistors on a chip or cycles per second is just that. It is not progress towards chips becoming human brains. Obviously you have not figured out the difference.

Of course, raw compute power is only one aspect. It may easily take 100 years to build Asimov's fully functional mechanical man, but I am convinced that it is inevitable that one day we will be able to do so if we choose. At some point it may even become economical.

We live in the now. As Jack Donahue used to say, yesterday is a cancelled check and tomorrow is a promissory note. What matters is today, which is the cash in hand.

I don't know about you but my crystal ball does not go out 100 years. Hell, I would be lucky to be able to see clearly what will happen tomorrow. I suspect that you are no better on that front than I am. So you will excuse me if I don't accept the Asimov BS as others may, even though I enjoyed the man's books when I was a kid.

The desire of people to have more power over their environment is infinite. The desire of many people to consume is bounded by their desire for security. This is demonstrated by the fact the people have savings. I don't care what you have for sale: I won't spend every last dollar to buy it.

You have yet to support your argument for people running out of things to do and for your position that they won't have any purchasing power in the future because some machines will earn all the money.

What's more, price matters. A human can't charge less to do a job than it will take him to live on.

That is what I said. But in a world where things will be as cheap as you claim living should be very easy even for those that do not make much money. By the way, what do you intend to use as money in your techno-utopian fantasy?

I believe Adam Smith figured this would determine the minimum price of labor. But if you're competing against technology, there is no guarantee that the minimum you could live on would be cheap enough to compete against someone with the right tools: you might need non-trivial capital along with your native capacity.

Again with the fantasy. Robots do not make themselves with raw materials that they produced themselves. They do not fix themselves or program themselves. In the real world they are damned expensive which is why for some functions like washing dishes, serving coffee, cleaning theaters, acting in plays or movies, playing music, fixing cars, driving taxis, flying planes, delivering newspapers, cooking food, etc., etc., etc., we still use human beings. In fact, I see little evidence to support your claim of robots being a big threat to human jobs. Which of the jobs above are in any danger of being done by robots over the next decade? Fifty years?

Right now, all this stuff is in the noise as far as its ability to prevent employment, and I suppose that may continue.

Your techno claims are certainly a lot of noise. You might want to reconsider them.

Obviously you have not figured out the difference. Get off your damned high horse. I am an expert in how computers think, and I know a bit about how humans do. I know a bit about the differences too, but one thing at a time.

We live in the now. Clearly.

You have yet to support your argument for people running out of things to do and for your position that they won't have any purchasing power in the future because some machines will earn all the money. The crux is robots being more capable than humans in some unspecified future. It hasn't happened, and may not, but I find it interesting. If you don't, fine for you.

Robots do not make themselves with raw materials that they produced themselves. They do not fix themselves or program themselves. There is measurable progress on these fronts, if you cared: some "3D printers" can fabricate themselves, robots that can replicate are being researches, etc. We will not be there soon. It is inevitable these will occur.

In the real world they are damned expensive which is why for some functions like washing dishes, serving coffee, cleaning theaters, acting in plays or movies, playing music, fixing cars, driving taxis, flying planes, delivering newspapers, cooking food, etc., etc., etc., we still use human beings. In fact, I see little evidence to support your claim of robots being a big threat to human jobs. Which of the jobs above are in any danger of being done by robots over the next decade? Fifty years? 10 years: delivering newspapers, only because most news will be online.50 years? All of them, potentially. Most of them, probably. There's real research being done on cars that drive themselves. There's a self-driven car race where in the first year no cars successfully finished. In the second year, most or all cars successfully traveled 100 miles unaided. Those things, at least, are happening in the foreseeable future.

Your techno claims are certainly a lot of noise. You might want to reconsider them. It might be better for my blood pressure, since you don't know what you're talking about.

Sean said: It might be better for my blood pressure, since you don't know what you're talking about. Actually no, it doesn't bother me that you don't know about this area or question it. What bothers me is your derision for things you don't understand, and your contempt for someone who does on the basis of your lack of understanding.

I was referring to a person I once knew who I am sure is mentally ill (but not retarded). But no, I am not saying that. I am only saying that unemployable people exist, not that most unemployed people are unemployable.

There are always some people that will not be unemployable at some period. That is why we depended on church groups, family members, insurance schemes, mutual societies, or charities. These voluntary institutions worked fine and took care of those that needed it long before governments got into the act.

Well actually, that's exactly what you said. Why don't you understand your own comments?

Here's your statement:

"What a I said was that most people in the bottom quintile have always been there."

Yes, exactly. And since "always been there" means they must have started out there, and since most people in the bottom quintile are young people just starting out, then most people must not improve their lives by age 50.

Are you really going to stick with that?

When you consider further that if most people start out as young people, and most young people start out in the bottom quintile, and if most of them have always been there, then you need to explain where the people in the other 4 quintiles came from, as obviously they didn't start out as young people, nor have they ever been poor, and there are 4 times as many of them as there are in the bottom quintile.

I can hardly wait to read your explanation.

By the way, just in case my number "50" is the trouble, I'll explain: I used an age for young people of 20. This isn't meant to represent an exact age, but to be approximate, representing a small range of ages. Adding your number, 30 years, gives me 50. Again, not intended as an exact age, but as a representative age within a small range. Are you OK with this?

I realize I must be careful when I present you with numbers to deal with.

These voluntary institutions worked fine and took care of those that needed it long before governments got into the act. I acceded that as long as the numbers remain reasonable, that is the case. The numbers will most likely remain reasonable.

Me too, I worked my way up. I don't argue witht the second part of this. But I have a problem with the first sentence. You say it is not true, and offer no evidence.

People I know who are my age who are in the bottom quintile have beeen there forever. None of my millionaire friends have wound up in the bottom quintile, not even the ones who inherited everything, and are of very modest persoanal achievements.

How many teenagers or adults in their twenties do you know who aren't a part of the first or second quintile? As they learn and gain experience in the workforce they are able to move up and usually wind up in the middle or top half of earners.

But let us forget the aging part and look at families that started at the bottom. If you are looking for evidence that you are wrong and making unsupported statements here you go. When you follow THE SAME PEOPLE most of the gains go to the bottom quintile. The top quintile actually gets no gains even though over time the top 20% has increased its share of total income.

"Again, I don't disagree. But if this were the case, all the runners would be faster."

=======================

You are too wrapped up in this. I liked the runner analogy, but it breaks down when you add in you r argument that the rich make everyone better off. Thats all I said.

The second observation I make is that it does not matter if everyone is better off (so far) if you keep bending that curve (which seems to be the case), eventually all the area winds up under the far right side, and it has to come at the expense of those on the left.

We are not arguing that the rich (whever they are this year) are not winding up with a greater share of the money. I think we agree on that.

The question is how long can it continue? Your answer is that it can continue indefinitely because the rich create more wealth.

That sounds like magic to me, but my answer comes in two parts. Fiorst part is that it depends on how fast they create new wealth compared to how fast they bend the curve.

The second part is that the poor still need some money. Either the rich will provide them with jobs, or the rich will provide them with charity, or the rich will get rid of them.

You argue that the rich have no obligation to provide jobs, and everyone is worse off if people have jobs that are less than optimally productive.

I think there are some people I'd rather not have working. In any case, the poor will have to get along somehow, and how they do it depends on the rich.

Actually the average marginal value of the human [labor] is already lower than that of a robot in every instance where a robot is employed, or else a human - or several humans - would be employed instead.Thank you. In other words, where robots can replace humans, they do. If robots could replace humans everywhere, they would. It's hard to know when we will be able to replace people with robots that can do most of what we can, but it will most definitely happen.

==========================

Seems to me this entire discussion boils down to this exchange.

Robots and machines will do more and more and humans will need to work less and less. More and more people will be marginalized.

The very best people will find something more to do, of course.

But somehow the marginalized people will be supported, or eliminated. Wealth transfer or Genocide?

"I'm arguing that your theory may be correct and fail in reality. I think that what happens on the streets is the real condition, and what you think about your theory is perception."

As a "scientist", surely you understand that for a theory to be correct, it must survive falsification. As soon as it fails in reality, it gets tossed out the window, no matter how correct it seems, and no matter how many people nelieve it.

Sean, I can't very well miss a point that you haven't really made till now. ;) Previously, you kept making vague claims that robots would replace us and seemed to focus on the "labor" aspect. I pointed out that it'd be great if they did all the labor and we could just focus on the mental stuff, just as we don't wash our clothes by hand anymore. Now you raise the possibility of AI. Assuming AI is even possible, which I don't grant, but let's just assume it for the sake of argument. At that point, there's nothing we can really predict because for all we know the AI might just go Skynet on us, deciding us lower life forms are not necessary anymore. We could go the way of the dodo bird.

At any rate, I think we are nowhere close to even doing small things with AIs, but the next big tech revolution is the physical part of robotics. That's something that's actually on hand and can be discussed, and my point is that it'll be great to have my burger grilled by the Wendy's robot, freeing up those burger flippers to do something with their brains.

Now you'll say that burger flippers can't do anything else, to which I say, bullshit! The clothes washers did something else, I guarantee the burger flippers will do something else and when their iPods cost $5 and flying cars cost $1k in 2011 dollars, they will love that life so much more than this piddling existence we have today.

As for all the hand-wringing about income inequality, I pointed out earlier that the market is dynamic. The more money that currently goes to the information workers at the top, the more incentive there is for some entrepreneur to come along and create medical diagnostic decision software or p2p investing pools and put them out business. The market corrects itself, if the damn government would just get out of the way.

As for all the hand-wringing about income inequality, I pointed out earlier that the market is dynamic. The more money that currently goes to the information workers at the top, the more incentive there is for some entrepreneur to come along and create medical diagnostic decision software or p2p investing pools and put them out business. The market corrects itself, if the damn government would just get out of the way.

Obviously, new wage earners in the bottom quintile have not been there a long time, and some of them escape. What a I said was that most people in the bottom quintile have always been there.

This is not a true statement. I provided you with the data showing this a number of times as has Mark. In fact, you actually posted on one of Mark's threads where you used mobility from the first quintile to justify spending money on the poor. Now you want us to spend money on the poor because they can't move from the first quintile. Notice the overlap?

Thanks for the interesting link. Yes, robotics without AI improvements are not a significant threat to employment. I do think AI must be possible just from an information theory perspective, although the energy and compute density arguments may mean we're going about it in an efficient way: we'll end up with something that couldn't mimic a human brain with human energy in a human-sized head if we go the current binary-silicon route. But the biggest problem with AI is the spatial recognition problem, which we *will* soon have enough compute density to solve.Everything on VangeIV's list except acting only requires that and you high speed robot arm technology to become feasible for machines:some functions like washing dishes, serving coffee, cleaning theaters, acting in plays or movies, playing music, fixing cars, driving taxis, flying planes, delivering newspapers, cooking food, etc., etc., etc. And I cheat and say acting will be covered by later-generation CG (although it will never replace human actors completely).

1. Reason and knowledge are completely separate things. Being unaware of historical examples is not a flaw of logic.

In your case you suffer both from a lack of knowledge and from bad logic.

2. I thought I made it clear *exactly* why those examples do not apply. "95+% of People have always found other ways to contribute" is a true statement. "People will always find other ways to contribute" is only an assumption that will never change. I pointed out a scenario that brings that assumption into some reasonable doubt based on extensive understanding of what computers can do, have done, and will do in the near future. And then I pointed out some potential consequences.

Your logic does not hold up. You began by assuming that the marginal value of the average human will fall below that of a robot, which will not be the case for 99.9% of all jobs currently done by human beings. And where robots are very useful they help increase real wages because their efficiency is passed on to the consumers that buy the products that the robots make. The few welders, painters, and assemblers replaced by those robots have skill sets that can be applied for the type of low volume work that robots cannot do economically.

You also seem to have ignored the fact that a new technology creates all kinds of new jobs both directly and at the periphery. And that when new technology allows us to be far more efficient with our use of inputs we are able to produce much more for a greater segment for society so that what used to be a luxury for the rich can be enjoyed by the masses. And by doing this even more jobs are created. Do you really believe that we would have more people building television sets or computers if we did not automate much of the production and assembly processes used to make them? Do you really think that the computer industry would have more revenues if it sold fewer hand made units. This whole line of argument is pure nonsense that is created by being careless and basing your logic on the wrong assumptions.

As I said before, history is very instructive to those who take the time to pay attention to it.

In your case you suffer both from a lack of knowledge and from bad logic. Oh, please.

This whole line of argument is pure nonsense that is created by being careless and basing your logic on the wrong assumptions. Let's lay out your argument logically: Comparative advantage says that if everything but the work only people can do gets cheaper, work the people can do gets more valuable. Since even a stupid human currently has far more intelligence (creative and directive) and effective dexterity in non-rote tasks than the best current robot, robots/computers and humans are highly complementary: robots need operators. Good tools create the capacity to do more things, which does creates more supply and discovers more demand. Robots need operators, designers, maintainers. The new tasks may be performed by new robots, but they also need more operators, etc. etc.

So far, so good.

Now, if computing power improves enough for robots to act autonomously, then suddenly computers start to *replace* the human operator and the human maintainer, driving their effective value way down, not up, Artists, designers, and creators are still required, but a lot of humans are displaced from work, and it is not clear where they go, whether the opportunities created are within the reach of all comers. Already, half of the time I come out of offering an interview, and one of my friends asks, "Burger Inversion Technician?" I often have to nod because these guys lack communication and creative skills.

Don't berate me for poor reason when the the best that you can lay out your own argument is the equivalent of "it always worked out in the past".

"I liked the runner analogy, but it breaks down when you add in you r argument that the rich make everyone better off. Thats all I said."

No, that's not what you said. Now you're just making stuff up as you try to squirm out of admitting you you were wrong. Why not just man up?

The analogy doesn't break down, when used as intended, to explain why the common complaint that "the rich are getting richer" is simply an expression of class envy.

I thought if I used a simple, clear, easy to understand analogy that you would be able to grasp it, but instead you are grasping at excuses to obfuscate your lack of comprehension.

You shouldn't try to squeeze any additional meaning out of the runner story, as it is only intended to illustrate a point in the same comment in which you found it. If you apply it in other comments, you will get confused, as is evident from your later comment.

Are you having trouble comprehending my next comment after the one with the runner story? If you need help, perhaps I can come up with an analogy to clarify that one also. Let me know.

Trying to find a crack in your armor of ignorance is quite a challenge!

"You are still mis-stating what I said.I never said anything about those that get out. "

I pasted your entire statement in the comment you are now whining about. I am using your own words. Do you misunderstand the word "most"? Or is it the phrase "always been there"? Remember, those are your words, not mine. Why do you continue to misunderstand your own comments? You can't expect me to explain them to you, that's just asking too much.

"You are talking about the people who got out, and I'm talking about the ones that wind up there. They didn't wind up there from the top decile, for the most part."

"What a I said was that most people in the bottom quintile have always been there."

Note that I have bolded your words. Those are direct copies, and are in context. I haven't changed them in any way. They have different meanings, but you don't seem to have noticed. Can you understand why it's hard to know what you really mean when you don't even know yourself?

You are so intent on defending a position that you invent assaults on it, just so you will have something to argue.

The same people are not in the ultrarich category every year. Nevertheless, it cannot be said that if the top 5% continue to obtain a higher and higher percentage of the total wealth, that this is a sustainable condition, or that it will not negatively affect the poor eventually.

Get yourself a copy of excel. If you can figure out how to work it, put a geometric curve on it.increase the area under curve.Increase the curvature.Iterate.Continue to iterate until the poor are wealthy or until you see that I am right: whether it is the same group of wealthy makes no difference in the end result.

You have a theory that the rich can always take a higher percentage of the wealth without hurting the poor because they create more wealth along the way. And, you claim, it isn't true the rich are getting richer, because the personnel change.

5% of the population has 90% of the wealth, then 92%. The poor are still better off because the economy grew by 3%. Then the wealthy have 94% and the poor are still better off, because the economy grew by 3%. Then 100% and the poor are still better off.

"Already, half of the time I come out of offering an interview, and one of my friends asks, "Burger Inversion Technician?" I often have to nod because these guys lack communication and creative skills."

Now, there's a job that could easily be done by robots. Just not cheaply enough...yet.

Until that time, though, I can say that I work for a major Fortune 500 company as a Burger Inversion Technician.

It WOULD seem like magic to you, as you're unable to understand the workings of the invisible hand.

"...but my answer comes in two parts. Fiorst part is that it depends on how fast they create new wealth compared to how fast they bend the curve."

You don't understand the nature of wealth, as evidenced by your story about the curve.

"The second part is that the poor still need some money. Either the rich will provide them with jobs, or the rich will provide them with charity, or the rich will get rid of them."

The poor don't need some money, they need the things money can buy, which others make a living at providing. If you are good at providing what others need you may become rich, in which you will buy even more of what others make, thereby making them wealthier.

I thought you said you had studied economics?

Again, the collectivist notions are in your way. You fail to understand why the rich ARE rich, and who makes them that way.

The rich will need people to work for them, so those people will have money to spend on things others make. The rich may CHOOSE to help people in need, but why would they want to get rid of potential customers?

"Get yourself a copy of excel. If you can figure out how to work it, put a geometric curve on it.increase the area under curve.Increase the curvature.Iterate.Continue to iterate until the poor are wealthy or until you see that I am right: whether it is the same group of wealthy makes no difference in the end result."

But I don't need to do that. Your curve doesn't represent what you wish to convey. All purchasing power can't be in the hands of a few. You are missing some important points, and have done so from the start. You are confusing money, income, and wealth. I get the impression that you have missed the entire discussion of machines and automation. I can't explain it all to you now.

Both of those statements cannot be true. You need to learn something about distributions. I've tried at least twice to point out your errors, but you are just not getting it. You will need to figure it out on your own.

"What is so hard about that?"

It's NOT hard, but you are really confused about it. Think carefully about it.

"You made up those numbers. In the real world the slowest runners are still the ones that cannot run at all, and the unemployable are still not employed."

Of course I made them up. I have no special knowledge of actual runners or their actual speeds. The numbers I used are reasonable, however, and I thought even you would understand something so simple, but I was wrong. I constantly overestimate you.

Chink! Chink! where's the weak spot in your ignorance? Or, are you still just squirming to avoid admitting you are wrong?

How about some definitions:

Someone who is unable to run, isn't a runner. They are not part of the runner analogy. To be counted, one must run.

An income distribution concrerns itself with incomes. Someone who is unemployed, has no income, and isn't part of that distribution. To be counted, one must have an income. Unemployment and incapacity are separate subjects. We aren't discussing them here. Stay focused.

"5% of the population has 90% of the wealth, then 92%. The poor are still better off because the economy grew by 3%. Then the wealthy have 94% and the poor are still better off, because the economy grew by 3%. Then 100% and the poor are still better off."

Get off your damned high horse. I am an expert in how computers think, and I know a bit about how humans do. I know a bit about the differences too, but one thing at a time.

If you were an expert AND knew something useful you would know that there are few jobs done by humans today that can be done by computers or robots. Many of those jobs are already highly automated. The robots can't be applied to same functions elsewhere because there is too much variation for the machines to handle. This is why you can use many welding robots on an assembly line but will not see them in construction and in short run applications.

The crux is robots being more capable than humans in some unspecified future. It hasn't happened, and may not, but I find it interesting. If you don't, fine for you.

I find robots, the idea of cold fusion, and many other things, interesting. But I have to live in the real world and deal with real world situations. There is no singularity anywhere on the horizon and even if it were to occur there is no evidence that the abundance it would bring would do any harm to the standard of living of human beings.

There is measurable progress on these fronts, if you cared: some "3D printers" can fabricate themselves, robots that can replicate are being researches, etc. We will not be there soon. It is inevitable these will occur.

I have looked at this thank you. It is the difference between a new baby being able to turn over and Usain Bolt running the 100 meters at the Olympics. While there is potential there is no guarantee that the baby will be able to match or exceed the performance.

10 years: delivering newspapers, only because most news will be online.

We are already doing that now. But I still see the local papers being delivered by hand, not because I want the newspaper but because they want to deliver the flyers.

50 years? All of them, potentially.

Really? We still wash dishes by hand. We do not do that because we don't know how to design robots to do the same jobs but because they do not make any sense and can never compete with a human loading a washing machine and the machine cleaning the dishes.

And you will not get robots directing human actors and tell them how they can get the most out of a scene. You will not be able to make a robot that can fix a car cheaper than a human using diagnostic and mechanical tools.

Most of them, probably. There's real research being done on cars that drive themselves. There's a self-driven car race where in the first year no cars successfully finished. In the second year, most or all cars successfully traveled 100 miles unaided. Those things, at least, are happening in the foreseeable future.

But even if you can get cars to drive themselves it is doubtful that you can get robots that drive taxis or that can fix cars. The only way to get any progress in automation today is to design processes that have little variation because the software and hardware cannot handle the complexity in real systems. There is nothing to suggest that we are anywhere near the breakthrough that is required to change any of this.

And certainly this plays no part in any serious discussion about jobs today or in the near future.

Actually no, it doesn't bother me that you don't know about this area or question it. What bothers me is your derision for things you don't understand, and your contempt for someone who does on the basis of your lack of understanding.

You are missing the point I am making. You may be an 'expert'. But that does not mean that you know what you are talking about in the real world because you make errors of arrogance in which you think that you know far more than you do. I merely point out that you don't.

The second observation I make is that it does not matter if everyone is better off (so far) if you keep bending that curve (which seems to be the case), eventually all the area winds up under the far right side, and it has to come at the expense of those on the left.

Your inability to think logically is fascinating to me. Let me help you out by pointing out an obvious problem.

You say, "it does not matter if everyone is better off", which means that you admit that people who used to be at the bottom saw their standard of living improve and are better off. If people are better off they are better off. End of story. Even if they don't see an improvement as large as those that are at the top, and remember that some from the bottom move up as others fall, they are still better off.

This means that you prefer for the bottom quintile to be poorer as long as they get a bigger piece of a shrinking pie. Now I do not know about others on this thread but I do not believe that you are this stupid. You may want to reconsider your position about how an improvement for the bottom of society is bad for society.

You made up those numbers. In the real world the slowest runners are still the ones that cannot run at all, and the unemployable are still not employed.

You just wrote that it, "does not matter if everyone is better off," which means that you do not care much about the unemployed or the poor. Your argument is about rich people being richer even if they are not the same rich from generation to generation or year to year. Yours is a class based argument that has nothing to do with individuals.

You think that church and other charity can take care of such people perfectly fine. I think history says otherwise.

But history shows the opposite of what you 'think.' Go to Nassau and ask the cab driver to take you to where the poor live. Ask why there aren't any homeless and who looks after them. Then read about mutual societies in the US or England. David Beito has a good book on the subject. The book is a response to the critics of Marvin Olasky's book who tried to argue that the enormous expenses of the modern welfare state made it far more comprehensive and effective than the narrower and less funded private social assistance sector of the past.

Beito shows that at the end of the nineteenth century and in the early part of the twentieth century American fraternal orders taht were based on the advocacy of self-reliance provided a great variety of services that are now done by government. The societies were very important for working people as well as minorities and immigrant groups. These societies allowed their members to avoid the need to go to charities when they experienced tough times. These societies were not like charity or the modern welfare programs. You were expected to be donor when you had plenty because you could wind up a recipient when you were hit by hard times.

As Beito and others have shown, the charities and friendly societies worked quite well and delivered social services far more effectively than the modern welfare state, which has to rely on massive taxation to survive.

Some Japanese factories use robots to reconfigure the factory, so that the other, production robots, can manufacture different products.

Less narrative and more facts would be in order. Which Japanese factories are left to robots and how do they do in the marketplace? One of Japan's problems was ignoring of business reality and the notion that profits did not matter. That did not work out very well.

It's hard to know when we will be able to replace people with robots that can do MOST of what we can, but it will most definitely happen.

But that is the problem. Robots can't do MOST of what we can. They are only useful in processes where there is little variation and long runs. If you have a process that requires that someone weld the same two parts in the same spot 450 times per shift than you use a robot because you can justify the tooling and setup costs. That is because you don't need the robot to think or make any complex decisions. Most jobs that people do do not fit those criteria.

If you were an expert AND knew something useful you would know that there are few jobs done by humans today that can be done by computers or robots. I do know that is the case today, and in the near term. I also know *why*, and therefore I have some glimmer as to *why* that won't always be the case.

If you're looking for near term empirical evidence that robots are ready to replace people, you won't find it, because they're not. But the fact that they will be able to in many tasks is no more a fantasy than Charles Babbage's conception of a computer.

Try serving coffee, walking dogs, fixing cars, painting houses, delivering newspapers, setting up a stereo system, changing the lighting system from incandescent to LCD, fixing a toilet, performing customer service functions, doing heart surgery, designing a dress, car, or new type of stapler. Try writing a play, directing and acting in films, writing novels, filming a TV show, announcing the players at your local NBA game, teaching children how to play soccer, etc., etc., etc. All of these except artistic creation could be done with evolutionary advancements of today's technology plus the crucial breakthrough in spacial and image recognition that everyone and their dog are working on. It will be solved, but it's no shocker it hasn't been yet, since it's the single most computationally intensive thing the brain does.

And certainly this plays no part in any serious discussion about jobs today or in the near future. When did I say I was talking about 10-15 years from now? If anything outside that realm is not worthy of discussion, then we can call it a day.

But that does not mean that you know what you are talking about in the real world because you make errors of arrogance in which you think that you know far more than you do. I merely point out that you don't. What have I said I know that I don't? I gave premises, with just enough evidence to show they're not complete pie-in-the-sky, and gave my opinion that such things will become real in the future. I then inferred logical consequences, and my logic has been good based on my premises. My premises are forward looking, and that's always chancy, but appropriate to this type of discussion. Doubt and a healthy skepticism is appropriate, but unless my interpretive senses are way off, I'm sensing contempt and disrespect, which I think is inappropriate except in response to the same.

Everything on VangeIV's list except acting only requires that and you high speed robot arm technology to become feasible for machines.

Really? Try doing some simple plumbing some time and tell me how a robot will do the complex decisions that are necessary for the job. Each job can be different and has its own set of small problems that can easily be solved by someone with a great deal of experience. But there is no way for a robot to do the job more effectively than a human either mechanically or mentally.

I think that you guys spend too much time reading science fiction and too little about the complexity of the real world. Solving some optical recognition problem in a lab is not real progress when you look at the complexity that we have to deal with in the real world.

Now, if computing power improves enough for robots to act autonomously, then suddenly computers start to *replace* the human operator and the human maintainer, driving their effective value way down, not up, Artists, designers, and creators are still required, but a lot of humans are displaced from work, and it is not clear where they go, whether the opportunities created are within the reach of all comers.

I seems to me that you still are clueless about the real world. The degree of advancement that is required for robots to be solve problems in a complex world is so great that there is no way for you to claim that it is possible within the next few decades. You are still stuck in the world of science fiction and underestimate just how difficult even the mundane tasks of everyday living are for a machine to accomplish.

Already, half of the time I come out of offering an interview, and one of my friends asks, "Burger Inversion Technician?" I often have to nod because these guys lack communication and creative skills.

But if you want to succeed in business you have to concentrate on communication and creative skills. Machines fail miserably on those fronts because they cannot handle complexity. Look the most advanced robot that we have in use and see just how simple the tasks that it does are and how controlled the environment that it operates in has to be for the machine to be effective.

Don't berate me for poor reason when the the best that you can lay out your own argument is the equivalent of "it always worked out in the past".

I do not make that argument. I use facts, data, and logic to back up what I say. You on the other hand, give us references to science fiction books and narratives.

eally? Try doing some simple plumbing some time and tell me how a robot will do the complex decisions that are necessary for the job. Actually, I agree that there are a lot of things that require common sense that computers are nowhere near emulating, and won't be even in the 50 year time frame. But they, like plumbing, weren't on your first list.

5% of the population has 90% of the wealth, then 92%. The poor are still better off because the economy grew by 3%. Then the wealthy have 94% and the poor are still better off, because the economy grew by 3%. Then 100% and the poor are still better off.

My theory is that is nonsense.

First of all, your 'math' is usually nonsense to begin with. But let us cast that aside and see why you have trouble with the poor improving their lot in life. Would you rather have them do worse but get a bigger share of the pie?

And before anyone misunderstands my own position, let me point out that I do not support the crony capitalism nonsense that many people here are trying to claim is the real thing. I would have let the Wall Street crowd, idiot investors, and foolish mortgage borrowers go under because they deserved to be punished for their stupidity. My argument is that those that earn huge amounts of money through voluntary transactions should not be taxed at a higher rate than people who earn less. If Steve Jobs makes 5,000 times the amount of income that I do he should pay 5,000 times more in income taxes.

I do not make that argument. I use facts, data, and logic to back up what I say. You on the other hand, give us references to science fiction books and narratives. This probably comes down to a difference in cognitive styles, but yes, most of your arguments could be condensed down to "historical data say X". But you didn't seem to understand "why", only "what". I'm aware of your facts, and they don't invalidate my model, so they're not helpful. But you don't seem to understand *why* they're not helpful, because you're just extrapolating, not operating from a real thought model. I build and validate logical models and apply them to software. Then we build chips, and by golly, they work. So yes, I'm oriented on principles, not data. I prefer thought to research. And guess what: it's a valid approach as long as you don't operate out of your depth.

I have not offered one. I merely pointed out what I think is a problem.

One claim is that the top 10% are a lot richer because they are better, faster, smarter.

If you just eliminate the other 90%, would they still be rich?

First, some of the top 10% are parasites who live off transfer from the poor to their companies. They would not be rich without those transfers and should not receive any transfers. But they do because both Republicans and Democrats like to use tax revenues to buy votes and get contributions.

The rest of the top 10% earn their money honestly, by trading their products to consumers for money. This is how Gates, Jobs, and many of the 'rich' made their money. And it is important to note that they will only be among the richest for as long they continue to get money from their customers because they make better products than their competitors. In a free market system once someone comes up with a better product at a lower cost they will fade into history as others have before them.

You are still stuck in the world of science fiction and underestimate just how difficult even the mundane tasks of everyday living are for a machine to accomplish. It is hard, and engineers are continuously prone to underrating the difficulties of solving a given problem. But my responses are based on asking myself "What functions would I personally need to write software to solve that problem?" Serving and making coffee, reading x-rays, repairing cars, etc.: I can figure out what it would take, I can see the research progress on those things, and so I mark it plausible. It only becomes a question of money and time. For example, consider repairing a car. You simply couldn't repair a 50's VW bug with a robot in the foreseeable future. But if you design a car in replaceable modules and use built-in computers for diagnostics, you could simply replace the module that squawked with a robot (you've constrained down the problem) and already handle 95% of maintenance and repair visits. You'd need people to solve the other 5%, but they'd need to actually be good. It's kind of like your 95% web solution for tech support. You need a lot fewer guys, non of them could be script monkeys. Do you see what I'm getting at?

If you're looking for near term empirical evidence that robots are ready to replace people, you won't find it, because they're not. But the fact that they will be able to in many tasks is no more a fantasy than Charles Babbage's conception of a computer.

The problem for your argument is the assumption that a job is simply a matter of performing a few tasks that can be done by computers or robots. They actually aren't. Most jobs require a degree of complexity that no machine will be able to handle for decades. And if by some miracle you get one that can you will soon find out that it is far too expensive to do the tasks that it is capable of doing. As I wrote before, it isn't a secret why we don't have robots washing dishes in restaurants.

What have I said I know that I don't? I gave premises, with just enough evidence to show they're not complete pie-in-the-sky, and gave my opinion that such things will become real in the future.

But they are pie-in-the-sky. You see the solving of some complex problem in one area as some major breakthrough that would allow machines to deal with the dynamic, non-linear system that we experience in daily living. Think of a simple job like installing a dishwasher and figure out what steps would have to be taken for anyone to do them. Now think of how a robot could do the same thing. And how much such a robot would cost. See the problem?

I then inferred logical consequences, and my logic has been good based on my premises.

Your premises are not very good. If I assume that I get breed flying horses I can use logic to come up with all kinds of conclusions. But that would not make that logic valid because the premises do matter.

My premises are forward looking, and that's always chancy, but appropriate to this type of discussion.

This discussion is about the very real observation that wealth distribution follows a power law. That seems to be shocking to some of the posters here who believe that what we observe in all societies can be improved by some form of social planning. From what I can tell, you are diverting from the discussion by making assumptions that are very unrealistic at this point in history.

. As I wrote before, it isn't a secret why we don't have robots washing dishes in restaurants. Maybe not, but I think you mis-identify the barriers, and therefore overestimate them.

You see the solving of some complex problem in one area as some major breakthrough that would allow machines to deal with the dynamic, non-linear system that we experience in daily living. There are many non-linear tasks, and surprisingly, installing a dishwasher is one of them because kitchens will tend to be custom. But you overestimate how many seemingly non-linear tasks are can be "linearizd", so to speak. You also underestimate the number of people that cannot reliably perform truly nonlinear tasks.

From what I can tell, you are diverting from the discussion by making assumptions that are very unrealistic at this point in history. I suppose I did hijack the thread, probably not the most polite thing to do. It is interesting to point out some of the conditions and assumption make that model stand.

I am sorry if I hurt your feelings but I have a very low tolerance for dumb arguments made by smart people who should know better and probably do. Most of the people I bring up this observation with quickly understand it and agree its time will come, just not yet. So I don't think it's dumb, although you could argue it is irrelevant, because it may not inform any decision in your lifetime. But if you have low tolerance for that kind of speculation, why jump in?

Actually, I agree that there are a lot of things that require common sense that computers are nowhere near emulating, and won't be even in the 50 year time frame. But they, like plumbing, weren't on your first list.

Yes they were. Each one of the jobs that I listed require a great deal of complexity that computers could not handle because the environments that those jobs are done in are not totally controlled. People are not ants in an ant colony. They deal in very complex environments even when they do the simplest of jobs. Machines can't do that. They need industrial engineers to work out the variation and make sure that everything happens within a planned environment. That limits what machines can do for now and makes them very useful tools for people who make the very decisions that you expect AI to make hundreds of years into the future. We live in the present, not the future and for now it makes more sense to discuss what is likely to happen here.

I really should wrap this up and attend more to work, but I'll take this one:Each one of the jobs that I listed require a great deal of complexity that computers could not handle because the environments that those jobs are done in are not totally controlled. For dishwashing, dog walking, bus boy services, food prep and serving, simple repair, etc. it's not the complexity of the environment, it's the fact that a computer can't take visual 3D data and create an object map. I've played enough 3D games, etc, to know that computer pathing and object handling can actually be pretty darn good once it knows what it's dealing with. It's mapping visual data into a set of standard object handling routines that will take a lot of grunt work: once. And the computing power required will be cheap. You could build a machine with a robot arm to wander table to table in a pre-programmed path, simply stop if it nears large objects in its preferred path, recognize plates, glasses, and silverware, and ask politely at minimum intervals if the guest is finished. There are laboratory robot arms that can pick up irregular objects like plates and coffee cups, so that currently difficult step will become reasonably cheap in time. If the robot can return to the kitchen, place the dishes in the conveyor like the one I used while working at "The Charcoal Pit". If the amortized cost of the thing is less than, say, $15,000 a year, it will pay for itself easily. If you sold 100K units, you'd need to price thesoftware at several hundred dollars, leaving you about the hardware costs of a Kia as a design point for a rechargeable and cheaply serviceable battery-powered model. Will you see one in 10 years? No. In 20? Quite possibly, although it will be a better design than I imagine. The biggest likely barrier will be if people won't *want* to be served by a robot.

It is hard, and engineers are continuously prone to underrating the difficulties of solving a given problem.

But here is where I think you have an issue with reality. Most jobs are not about solving a particular problem but about a process that is made up of many separate events linked in some way or another and not always in the same way. I am pointing out that engineers have no way yet to deal with the complexity involved. That is why they need to break things down to a simple function that is performed in a very controlled manner.

But my responses are based on asking myself "What functions would I personally need to write software to solve that problem?"

As I said, you can try to solve one small problem but that will not be enough to replace human beings who do the job now unless that is all those human beings do.

Serving and making coffee,...

We already have coffee makers. But the serving part will be done by humans because it makes the most sense in most cases no matter what you do with AI.

...reading x-rays,...

This may be promising but advances have come a long way because of better resolution. We still leave the final interpretation to doctors who make that interpretation on the basis of the case history and their own experience. By improving the process you may actually create even more work for doctors because they will be able to look at many more things than they can now.

...repairing cars, etc.:..

Sorry but this is far too complicated for a robot to do. Where we can automate we already have by developing diagnostic tools and specialty equipment that allows human beings to do the job faster. But with the increasing complexity there are more jobs rather than less and they are better paid than they used to be.

I can figure out what it would take, I can see the research progress on those things, and so I mark it plausible.

Try looking at a real process in the real world some time. For every minute of activity you need about five to ten minutes of study. Whenever the conditions change you have to do the study over again to ensure that the activities are well documented and known. In a dynamic system you will find that there are thousands of hours required for every hour of fairly mundane activity done by even the least skilled employees. And you will find that where automation is possible some other engineer has already been there and done the job. This impact of variation is why you have so much automation in processes like carpet making and so little in something like aircraft assembly. You can never overcome the variation for most of the jobs now done by human beings unless you have massive amounts of capital to ensure that the work environment is free of the type of variation that machines cannot handle. But if you look around you will find that those types of jobs have already been automated and have caused many more jobs to be created as the products became much cheaper and more affordable by a broader section of society.

For example, consider repairing a car. You simply couldn't repair a 50's VW bug with a robot in the foreseeable future.

Correct.

But if you design a car in replaceable modules and use built-in computers for diagnostics, you could simply replace the module that squawked with a robot (you've constrained down the problem) and already handle 95% of maintenance and repair visits.

I have news for you. We already have this for many cars. Mechanics take out components and put in new ones rather than try to fix them. We don't use robots for the job because they make no sense. Ask any industrial engineer why that is the case if you can't figure it out.

You'd need people to solve the other 5%, but they'd need to actually be good. It's kind of like your 95% web solution for tech support. You need a lot fewer guys, non of them could be script monkeys. Do you see what I'm getting at?

You still have no clue about the complexity involved in the performance of even the most mundane jobs and the variation of activities performed by employees over time.